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Global energy trade: creating a robust network

The link between global economic growth and energy demand is clear — to grow and prosper, the world will need about 25 percent more energy by 2040. By enabling energy supplies to flow smoothly between nations, a robust global trading network helps meet the need for energy efficiently and affordably.

Article
Jan. 14, 2019

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Global energy trade: creating a robust network

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Global energy commerce

While global energy demand will require a wide range of supply and resources, studies indicate that the majority of global supply will continue to be met with oil and natural gas.

A key to meeting energy needs and providing better living standards to hundreds of millions of people is being able to find, produce and transport energy products of all types throughout the world in a reliable and secure manner. Doing this at the scale required by nearly 8 billion people each day is an enormous challenge for ExxonMobil and the global energy industry.

ExxonMobil supports an open, unbiased and rules-based trade and investment system and sees those principles as essential to global free enterprise and to promoting productivity and economic growth. Furthermore, free trade and strong investment protections buttress energy security by encouraging access to diverse energy supplies and production sufficient to meet growing global demand.

Sound trade policies and protections also enable effective supply chains and the efficient movement of capital, people, information and all products.

Energy trade not only includes liquefied natural gas (LNG) and crude oil but numerous other products derived from crude oil, including refined products such as gasoline and aviation fuels, as well as distillates like diesel fuel and heating oil.

United States exports of finished products have also been growing significantly for a number of years.

However, most people don’t typically think about the wide range of other items produced from crude oil and natural gas. There are a huge number of such products, in fact thousands, which are produced, exported and used every day. For example, the chemicals industry is one of the United States’ largest manufacturing industries, serving both a sizable domestic market and an expanding global market. It is also one of the top exporting sectors of United States manufacturing. Accounting for 15 percent of global chemical shipments, the United States is a world leader in chemicals production and exports.

Chemicals used in the production of plastics, adhesives and agricultural chemicals all have origins in crude oil or natural gas. So do pharmaceuticals, including prescription drugs, vaccines, vitamins and over-the-counter drugs for human and veterinary applications. And everyday consumer products including soaps, detergents and cleaners, toiletries and cosmetics rely on hydrocarbons in their manufacturing processes.

Trade agreements and policy

Free Trade Agreements have proven to be among the best ways to open up markets by enhancing rules of trade law, reducing tariff and non-tariff barriers and by creating a more stable and transparent trading and investment environment. The free flow of commerce is essential to maximizing global economic growth and prosperity, and even has implications for national security.

Ever since Adam Smith there has been virtual unanimity among economists, whatever their ideological position on other issues, that international free trade is in the best interests of trading countries and of the world.

Milton Friedman

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ExxonMobil’s approach to the management of international trade and investment focuses on:

Advancing free and transparent trade and investment agreements.

Supporting efforts to enhance the global movement of goods and services, information, capital and investment in an open, secure and unbiased manner.

The U.S. should use the economic power of its free enterprise system to help promote access to markets, the rule of law and sanctity of commercial contracts. Enlarging markets including those for oil, gas and chemicals, benefits all consumers and promotes the efficient production and distribution of goods.

Barriers to free trade and open investment in the energy sector can dampen economic growth and harm the nation’s energy security by limiting the diversity of energy supplies, including those produced in the United States.

ExxonMobil believes that registering and voting, keeping informed on political matters, serving in civic bodies and campaigning and office-holding at local, state and national levels are important rights and responsibilities of the citizens of a democracy.

For some time now, ExxonMobil has said that a uniform price of carbon applied consistently across the economy is a sensible approach to emissions reduction. Specifically, we have stated that a revenue-neutral carbon tax is one policy option being considered by policymakers that offers the best prospects for progress at the lowest economic cost to society.